Making Tax Digital for Income Tax Checker

Last updated 23 September 2026. Checked against HMRC's guidance on GOV.UK, including the qualifying income guidance updated on 11 September 2026.

What is Making Tax Digital for Income Tax?

Making Tax Digital (MTD) for Income Tax changes how sole traders and landlords report their income to HMRC. Instead of one Self Assessment return a year, people in MTD must:

• keep digital records of their business and property income and expenses
• send a quarterly update to HMRC every three months through compatible software
• submit their tax return through the same software by 31 January after the end of the tax year

It started on 6 April 2026 for people with qualifying income over £50,000 and is being phased in over three years. The way you pay tax and the payment dates don't change.

When do you need to start using MTD?

Your start date depends on your qualifying income in an earlier tax year. HMRC looks at your Self Assessment return for that year:

The thresholds are "more than", so qualifying income of exactly £50,000 in 2024 to 2025 doesn't bring you in from April 2026.

The £20,000 threshold carries on in later years. If your qualifying income first goes over £20,000 in, say, 2027 to 2028, you start on 6 April 2029: the April after the 31 January filing deadline for that year's return.

What counts as qualifying income?

This is where many people get caught out. Qualifying income is your total income from self-employment and property before expenses. It's your turnover and gross rents, not your profit.

What counts

• Turnover from all your self-employed businesses added together
• Rental income from UK and overseas property (if you're UK resident)
• Your share of rent from property you own jointly

What doesn't count

• Salary or wages taxed through PAYE
• Your share of profits from a partnership
• Dividends, including dividends from your own limited company
• The State Pension and private pensions

Jointly owned property

Only your share counts. If you and your partner own a rental property that brings in £50,000 a year and split the income equally, your qualifying income from it is £25,000.

If you started part way through a year

If you started your business or began letting property during the tax year, HMRC scales your income up to a full 12 months to compare it with the threshold. For example, £12,500 earned in 6 months counts as £25,000. The checker above does this for you when you choose the number of months.

Company directors

If you run a limited company and take a salary and dividends, that income doesn't count, and MTD for Income Tax doesn't apply to it. You'd only need MTD if you also have self-employment or rental income above the threshold. Our dividend vs salary calculator can help you plan how you pay yourself.

Who is exempt from MTD for Income Tax?

Some people are exempt automatically and don't need to apply. That includes people who:

• have qualifying income of £20,000 or less
• don't have a National Insurance number
• have a power of attorney or legal guardian dealing with their tax because they can't manage their own affairs
• are filing as a trustee, or as the personal representative of someone who has died
• get Married Couple's Allowance or Blind Person's Allowance
• are Lloyd's underwriting members, or ministers of religion filing the SA102M pages

Partnerships don't need to use MTD for Income Tax yet. HMRC hasn't set a date.

Temporary exemptions for 2026 to 2027

You don't need to use MTD for the 2026 to 2027 tax year if your 2024 to 2025 return:

• claimed averaging relief (used by farmers, market gardeners and some creative workers)
• claimed qualifying care relief (for example, as a foster or kinship carer)
• included the SA107 pages for trust or estate income, or the SA109 residence pages

From 2027 to 2028, you'll need MTD if your qualifying income is over £30,000.

Digital exclusion

You can apply for an exemption if you can't use digital tools because of your age, a health condition or disability, your religious beliefs, or because you can't get internet access at home, work or another suitable place. HMRC won't accept an application only because you've always used paper returns, aren't familiar with software, or would find it costly. You must follow MTD unless HMRC grants the exemption. Find out how to apply on GOV.UK.

Quarterly updates and deadlines

A quarterly update is a summary of your income and expenses sent from your software. It isn't a tax return, and you don't pay tax with it. Updates are cumulative: each one covers the tax year so far, not just the last three months.

Calendar periods suit you if your records follow calendar months. You choose which to use in your software. After the fourth update, you submit your tax return for the year by 31 January. You can correct errors by resending your fourth quarterly update before you submit your return.

The checker above lists your personal deadlines for your first two MTD years and lets you download them to Google Calendar, Outlook or Apple Calendar with a reminder 7 days before each one.

Penalties under MTD for Income Tax

Late submissions

MTD uses a points-based system. Each missed quarterly update or tax return deadline adds a penalty point. When you reach 4 points, you pay a £200 penalty, then another £200 for each further missed deadline. Points below the threshold expire after 24 months. Once you reach 4, you need to submit everything on time for 12 months, and have no outstanding submissions from the previous 24 months, to reset your points.

Late payments

For the 2026 to 2027 tax year, there's no late payment penalty if you pay within 30 days of the due date. From 2027 to 2028, that penalty-free period drops to 15 days. After it, you pay a percentage of the tax owed (3% in 2026 to 2027, 4% from 2027 to 2028), a second percentage if the tax is still unpaid at 30 days, and a daily charge at 10% a year from day 31. Late payment interest is charged on top.

How to get ready for MTD

1. Check your qualifying income for each relevant year using turnover and gross rents.
2. Choose compatible software. HMRC's software finder lists products that have been through its recognition process. HMRC says free products are available for simple tax affairs. HMRC doesn't provide its own software.
3. Decide how to keep digital records. You can use full bookkeeping software, or keep records in a spreadsheet and send updates through bridging software, as long as the two are digitally linked.
4. Record transactions as you go. Each record needs the amount, the date and a category. You don't have to scan receipts, but you must keep your usual supporting records.
5. Sign up. You sign up through your Government Gateway account, or your agent can do it for you. From September 2026, HMRC began signing up people who needed MTD for 2026 to 2027 but hadn't signed up themselves.
6. Agree who does what with your accountant, if you have one.
7. Keep filing your normal Self Assessment returns for the years before your MTD start date.

You can also sign up voluntarily for the current or next tax year, before you have to, to get used to the process.

Can you stop using MTD?

Once you're in MTD, you stay in even if your income drops for a year. You can only stop if your qualifying income stays at or below the threshold for three tax years in a row, or if all your self-employment and property income stops. If one of several businesses closes but others continue, you still need MTD.

Frequently asked questions

Is MTD for Income Tax based on turnover or profit?

Turnover. Qualifying income is your self-employment and property income before expenses, not your profit.

Do I need MTD if I'm employed and self-employed?

Only if your self-employment and property income before expenses is over the threshold. Your salary doesn't count towards it.

Do limited company directors need MTD for Income Tax?

Not for their salary or dividends, which don't count. Directors only need it if they also have self-employment or property income over the threshold.

Can I use spreadsheets for Making Tax Digital?

Yes. You can keep digital records in a spreadsheet and use bridging software to send your updates, as long as the spreadsheet and the software are digitally linked.

Is there a penalty for a late quarterly update in 2026 to 2027?

No penalty points are given for late quarterly updates in the 2026 to 2027 tax year, but you must still send them.

Is there free MTD software?

HMRC says free products are available for people with simple tax affairs, though they may have limits. Use HMRC's software finder to compare options.

Do partnerships need to use MTD for Income Tax?

Not yet. HMRC says partnerships will need to use it in the future but hasn't set a date. Your share of partnership profit doesn't count towards your qualifying income.

More free tools for UK businesses

• UK Take-Home Pay CalculatorNet pay after tax, NI and pension
• Dividend vs Salary OptimiserBest split for limited company directors
• Late Payment Interest CalculatorClaim interest on overdue invoices
• All free business toolsSee all our calculators

Independent guidance from UK Creative Ventures, not affiliated with HMRC. This page is general information, not tax advice. Sources: GOV.UK: Check if you're eligible for MTD for Income Tax; Work out your qualifying income; Exemptions; Use MTD for Income Tax; Penalties.